23 Feb 05 - NZ Government Grants for Business - Euan Purdie

8/14/2019 23 Feb 05 - NZ Government Grants for Business - Euan Purdie

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Business Programmes

NZTE - Business Development

The problem we are addressing

4(1)Ca lculatedu sing1999 PPPs.

Trend in income per person(GDP per capita, OECD = 100)

Gap of NZ$ 6,400 per person(adjusted for cost of living)

New Zealand

Ireland

Australia

60

70

80

90

100

110

120

130

1970 1974 1978 1982 1986 1990 1994 1998 2002


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Small New Zealand has to think big

Major issue: increasing theglobal focus andconnectedness (exports) of our SMEs

NZ is characterised by amajority of SMEs - only2.5% of which areexporting.

Overall, our exportingcommunity is a smallfragment of our businesscommunity - just under 4%.


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Our Key Funds

EDG-CB(max 20K pa)

EDG-MD(max 100K pa, min 20K pa

over 5 years)

GSF(max 500K over 3 years)

Turnover Ceiling Guidance Main Intent of Fund

< 5 million

< 50 million

< 20 million

Building Capability

International MarketDevelopment increasing ourparticipation inglobal economy

FacilitatingSignificant Growth

Enterprise Development Grant (EDG)

To assist individual entrepreneurs and companies to gain additional businessskills, obtain external expertise and assist in developing business projects

For Entrepreneurs, start-ups and individual businesses Less 20 FTEs or


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EDG-CB range of projects

Services of a business mentor

Advanced management or technology-based training

Specialised advice and expertise for projects or concepts that lead towardsenhanced capability, profitability and international competitiveness(feasibility studies, e-business, strategic design advice, market research,enhancement & uptake of new technologies, human resources, prototypedesign and development, intellectual property, strategic planning,

environmental management, production management)

International market development activities related to investigating a new marketand/or participating at a trade fair

(Plus other GSF range of projects)

www.nzte.govt.nz

www.nzte.govt.nzEligibility Criteria

Businesses Must:

Be Resident in New Zealand For Tax Purposes Be Operating in a Commercial Environment Be GST Registered Be Financially Viable Have a Turnover of Less than $20 Million


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EDG-MD Expenditure Categories Market Visits

Market Visits

Covered:

Set Rate Travel costs for international flight as per NZTE AllowanceSet Rate per diem (Covers Food, Accommodation & incidentals)Inwards visits by buyers or potential buyers

Not Covered: Flights bought with Air points/Frequent Flyer MilesInternal FlightsRental Cars

www.nzte.govt.nz

EDG-MD Expenditure Categories In Market Representation

In Market RepresentationSalary/Contracting fees of staff implementing strategy in market

Covered: Must be located in-marketContractors & Consultants in-marketIf a staff member, must be permanent & FulltimeNZ Employees on Secondment

Not Covered:

Living ExpensesNZ Based RolesExisting or Part-Time RolesFlights or Per Diem Allowance

www.nzte.govt.nz


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Advertising & Promotion

Covered:

Consultants related to marketing, brand, advertising & PR strategy & PlacementConsultants related to design & productionPlacement CostsCosts for Creation & Production of Material

Transportation Costs

EDG-MD Expenditure Categories Advertising & Promotion

www.nzte.govt.nz

EDG-MD Expenditure Categories Marketing Collateral

Marketing Collateral

Covered:

Consultants related to marketing, brand, advertising & PR strategy & PlacementConsultants related to design & productionPlacement CostsCosts for Creation & Production of MaterialTransportation Costs

www.nzte.govt.nz


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EDG-MD Expenditure Categories Trade Fair & Events

Trade Fair & Events

Covered:

Trade Fair Entry FeesTrade Fair Exhibition CostsConference Attendance Fees

Not Covered:

Expenditure related to activities sponsored by NZTE

www.nzte.govt.nz

EDG-MD Expenditure Categories Market Research

Market Research expenditure will be supported when related to theimplementation of a market development strategy

Covered:

Market StructureCompetitive IssuesCustomer Characteristics

Not Covered:

Research aimed at formulating a market development strategy

www.nzte.govt.nz


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Growth Services Fund (GSF)

To enable hi-growth potential firms (or groups of firms) to purchase externaladvice and expertise, marketing intelligence and development services.

Target clients are SMEs with high growth potential and commitment Turnover 20% p.a. or >$5M over 5 years Less 100 FTEs or


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Guide to Eligible and Ineligible Projects for GSF Co-funding:

Eligible

Preparation of documentation to obtain finance for business development(consideration should also be given to whether utilising NZTEs Escalator service)

Feasibility studies

Development of prototype design and testing

Development of business, strategic or marketing plans, including market

research Electronic commerce strategy

Advice and assistance for human resource development

Assessment and implementation of total quality management, qualityassurance, and business excellence programmes (e.g. ISO certification)

www.nzte.govt.nz

Guide to Eligible and Ineligible Projects for GSF Co-funding Cont:

Development of intellectual property protection and commercialisation

Financial planning and development of improved financial systems as part of adevelopment project

Advice on legal, tax or other issues relating to a new business structureunderpinning a new business initiative

Assistance to fund external, professional mentors or project managers to assistwith the implementation of a growth initiative for up to 12 months

International business exchanges

Market research and export development assistance from a service provider other than NZTE

www.nzte.govt.nz


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Ineligible

business as usual. Care must be taken to draw a line between strategic andbusiness as usual work. Work up to the point of proof of concept would beconsidered as eligible activity whilst the implementation of the concept wouldfall into business as usual. If skill shortages are a barrier to the growth of acompany, developing a strategy to address these could form part of a growthrelated project, but the actual recruitment costs would not, as they are part of business as usual.

items of capital expenditure

activities provided by other government programmes. For example, TechnologyNZ currently funds R&D and technology development. To manage thispotential overlap, NZTE will only fund the development of prototype designand testing where this falls outside the scope of projects typically funded bythe TBG and GPRSD schemes.

www.nzte.govt.nz

Ineligible cont:

purchase of services from NZTE (e.g. market research), as these servicesalready contain a government subsidy. Clients have two choices if requiringmarket research or export development services that are part of NZTEs servicerange:

www.nzte.govt.nz

they can access the services provided by NZTEs offshore network andpay the normal fees themselves; or

they can source the services from an alternative service provider (if available) and have the activity co-funded (up to 50%) through theGSF. Both options are equally acceptable.


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Frequently Asked Questions

Q. How do the $100K & $500K Limits apply to GSF & EDG?

A.

$100K Project Year Limit

An applicant cannot receive more than $100K per project year (12 Calender Months fromRetrospective Date)

$100K NZTE Financial Year Limit

An applicant cannot receive more than $100K per NZTE financial year from EDG-MD &EDG-CB

$500K Lifetime Limit

An applicant cannot receive more than $500K from EDG-MD,CB & GSF for any MarketDevelopment Activity received from these funds since the inception of NZTE

www.nzte.govt.nz

Enterprise Culture Skills Activities (ECSA)

To promote attitudes, values and skills that support entrepreneurial activity and businesssuccess in NZ

Focus is on seed funding and piloting new and innovative approachesECSA is a contestable fund

Benefits:

A climate that recognises and reinforces business success amongst existing andpotential b usinesses

A social culture that positively supports entrepreneurial activity and businesssuccess

A culture in education where business is seen as a positive contributor to societyand a worthwhile career aspiration in students

Students developing e nterprising a ttitudes and behaviours and business-relevantskills

www.nzte.govt.nz


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W o r

k s h o p

2

Investment Deals

Understanding the business needs and deal requirements

Evaluation the business opportunity

Prepare and Broker the deal

Initial assessment for potential Initial Assessment

Current Position Analysis

Business NeedsAssessment

Broker the deal

Deal Broker Panel

W o r

k s h o p

3

N Z T E

, T e c h

N Z , E D A

, p r i v a t e s e c t o r

Consider the deal opportunities

Process

Current Position Analysis

Stage of Company Competitive advantage Cash position Governance / mgmt Past performance Market opportunities Technical review High level IP review

Business Needs Assessment

Company needs analysis IP strategy & position / mapping Competitor i nformation Alliances / synergies required Preliminary valuation Deal alternatives Changes required to optimise dealoutcome Technical strategy & position

Pre-due diligence review Alliance / Partner identification Deal Structuring IP review Director appointment Legal review Investor ID and negotiation Financial and Valuation Offer Document Term sheet structure and negotiation Due Diligence management

Who Delivers Escalator

Economic Development Association of New Zealand (EDANZ)

Deloitte

I Grow New Zealand Ltd

Ignition Partner Ltd

Realize Technology Ltd

Escalator


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Foundation for Research Science and Technology

What is FRST? FRST invests in research, science and technology on behalf of the

New Zealand Government to enhance the wealth and well being of New Zealanders.

How do they achieve this? By investing nearly $400 million annually

By stimulating both research providers and the users of research

By working closely with other Government agencies such as NZTE

www.frst.govt.nz/business

Technology New Zealand

SmartStart

The SmartStart scheme focuses on building awareness associated withtechnical innovation.

Assists with overcoming the cost barriers for small to medium sizedbusinesses wanting technology appraisal services

Access the new technology and/or access to sources of guidance andassistance for technology-based projects

www.technz.co.nz


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GPSRDGrants for Private Sector Research and Development

Contribute to firm growth and build research and developmentmanagement skills

Objective is to increase the level of private sector investment inresearch & development

Aimed at SMEs with a base level of technology awareness

Provides grants values from $10,000 up to $100,000 for SMEsembarking on new research and development

www.technz.co.nz


TBGTechnology for Business Growth

Supports leading edge projects by funding the challenging research anddevelopment stage and is targeted towards projects that movecompanies towards high added value, high-margin, technology-basedproducts, processes or services.

Provides up to 50% of the project costs

Funding normally ranges from $50,000 to $2 million

www.technz.co.nz


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What TechNZ looks for

Project Project Plan

- Events and milestones, killevents

- Technology gap- Knowns vs unknowns- People and skills\Detailed

costs; hrs, $, invoices, ganttchart

- IP agreement

Company Business Plan

- People, technology, fit, futuregrowth

- Market channels- 3 yr finances- Benefit of project, including $

- Meetings and integrations of project

Cash from company

Documents

23 Feb 05 - NZ Government Grants for Business - Euan Purdie